A working capital advance is a type of short-term financing used to cover a business's daily operational expenses, including payroll, rent, utilities, and inventory purchases. This financing option is useful for managing cash flow gaps or for funding day-to-day operations during periods when revenues might be lower or expenses unexpectedly higher.

Short-Term Duration: This option typically has shorter repayment periods, often ranging from a few months to a year.

Repayment: Repayment terms can vary but are generally based off the average amount of revenue that the business receives in a period of time, and is paid either daily or weekly..

Collateral: Working capital advances can be either secured or unsecured. Secured loans require collateral, such as inventory, accounts receivable, or other business assets. Unsecured loans do not require collateral but may come with higher interest rates.

Factor Rates: Factor rates can vary based on the funder, the borrower’s creditworthiness, and whether the loan is secured or unsecured.